Report: Google to Take on Uber With Self-Driving ‘Rides for Hire’

Google is turning its self-driving-cars unit into a standalone business under the parent company Alphabet next year, Bloomberg’s John Lippert and Jack Clark reported Wednesday.

The US internet giant is said to believe the UK could take a lead in developing laws for the vehicles, which are being tested in California and are expected to become publicly available by 2020. Google’s autonomous vehicles have logged more than 1 million miles (1.6 million kilometers) on public roads, mostly around San Francisco and Austin, Texas, making these cities logical places for launching a service, said the person, who asked not to be identified because the plans are private. The cars are fitted with laser sensor technology which can spot pedestrians and other traffic, and have been tested on more than one million miles of public roads over the last three years. That’s still pretty vague, but it doesn’t sound much different from the service Uber provides—especially since one of Uber’s goals, CEO Travis Kalanick has said, is to get into the driverless-car business. “Look, Google is doing the driverless thing, Tesla is doing the driverless thing, Apple is doing the driverless thing,” Kalanick said in an interview with Late Show host Stephen Colbert in September.

The fleets — which would include a range of large and small vehicles — could be deployed first in confined areas like college campuses, military bases or corporate office parks, the person said. Manik Gupta, who announced his move on LinkedIn after working on Google Maps for seven years (most recently as the director of product management), just joined Uber as the director of its maps product. But the company has previously said that despite its investment and research in self-driving cars, it doesn’t intend on becoming a car manufacturer. The suggestion that Google’s autonomous cars would be used for hailing rides isn’t a new one, but this is the first time that a plan appears to be coming together to actually make it happen. The race to develop a self-driving vehicle fleet has intensified since February when Bloomberg reported that Google was developing a rival to Uber Technologies Inc., most likely in conjunction with its driverless-car project.

The Government has enthusiastically put millions of pounds towards driverless car research amid hopes the vehicles will cut commuting time, accidents and congestion on the roads. Uber is pursuing its own autonomous capabilities, while automakers are deploying semi-autonomous technologies while experimenting with so-called shared mobility. Google has praised Britain’s approach to how driverless cars should be governed and insured, while the Government wants to encourage the technology in the UK and insists it will change the law. By challenging ride-sharing pioneers like Uber and Lyft Inc., as well as traditional taxis, Google is providing the clearest indication yet how it plans to make money from self-driving automotive technologies that it began testing in 2009. Minutes from meetings released under the Freedom of Information Act show Sarah Hunter from the firm’s experimental division Google X said the company is ‘very positive’ about the UK’s approach.

At the time, the company told Quartz that it had no immediate plans to spin the program out into its own business, but that it was a “good candidate” for that in the future. Meanwhile Michael Hurwitz, head of technology for the DfT, has ‘emphasised our desire to work with Google to ensure the UK stays ahead’, according to us report.

The exodus from Google to Uber has been so noticeable that Fallows recently said on stage at a recent StrictlyVC event that one out of three people he worked with at the $50 billion startup was a former Google colleague. While polls show a third of U.S. consumers are interested in buying self-driving cars, the rest are skittish because they’re worried about losing control, said Thilo Koslowski, vice president and automotive practice leader at Gartner Inc. “These potential ride-for-hire services could allow consumers to experience the technology and embrace it in a bigger way,” he said. “That would help not just Google but the entire industry.” In August, the Mountain View, California-based company reorganized itself into a conglomerate called Alphabet.

Google’s venture division, Google Ventures, invested roughly $250 million in Uber in 2013, but the two companies’ expanding ambitions mean they are increasingly eyeing each other’s turf. Uber is working on its own fleet of self-driving cars for hire, and just about every major car manufacturer seems to be working on bringing driverless cars to the streets. The front of the vehicle has a soft foam-like material where a traditional bumper would be and a more flexible windscreen, in an attempt to be safer for pedestrians. Toyota has pledged $1 billion into research for robotics and AI, Tesla has already introduced an “autopilot” self-driving mode, and Apple is apparently also researching autonomous vehicles.

The prototypes are restricted to speeds of 25mph (40 km/h) and the ability to self-drive will depend on specifically designed Google road maps tested on the company’s current fleet of vehicles. Its life sciences division is now Verily, and its robotics division—including Boston Dynamics—is now apparently called “Replicant” within the company. A combination of radar, lasers and cameras sitting on top of the roof give the car a 360-degree ‘view’, with sensors linked to computer software able to ‘see’ and identify people, cars, road signs and markings and traffic lights.

Uber has recruited dozens of autonomous-vehicle researchers from Carnegie Mellon University’s robotics program and in June hired Brian McClendon, Google’s former vice president of engineering, to run Uber’s Advanced Technologies Center. Besides offering its own ride-for-hire service, Google probably will to try to capitalize on self-driving research in two other ways, said Mark Boyadjis, an analyst at IHS Automotive. First, the company may pump the same ads into self-driving cars that appear on Google’s search engine, and second, it may be able to profit through licensing arrangements that let traditional automakers participate in its ride-sharing and other self-driving services, he said.

It’s also testing a ride-hailing service called Go Ride on its Dearborn, Michigan, campus, using customized Ford Transit vans with individual seats and Wi-Fi. At the same time, automakers are bringing more pieces of self-driving technology to market while insisting that the driver is responsible for the vehicle’s operation and may need to take control of the steering wheel in challenging situations. Tesla Motors Inc. in October rolled out its Autopilot suite that can drive on well-tended highways and change lanes safely without the driver taking the wheel.